SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
NOVEMBER 10, 1998, (JULY 24, 1998)
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
NOVEMBER 10, 1998, (AUGUST 10, 1998)
THE MACERICH COMPANY
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(Exact name of Registrant as Specified in Charter)
Maryland 1-12504 94-4448705
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(State or Other Jurisdiction of (Commission (IRS employer
Incorporation) file number) Identification No.)
401 Wilshire Boulevard, Suite 700, Santa Monica, CA 90401
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code (310) 394-6911
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
This Form 8-K/A, Amendment No. 1, is being filed for the purpose of filing
certain financial statements and pro forma financial information with respect
to the Current Report on Form 8-K filed by the registrant on August 7, 1998
regarding the acquisition of a regional mall named The Village at Corte
Madera and the Current Report on Form 8-K filed by the registrant on August
20, 1998 regarding the acquisition of a shopping mall named Carmel Plaza.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Real Estate Operations
Acquired - The Village at Corte Madera
Independent Auditors' Report F-1
Statements of Revenue and
Certain Expenses for the period January 1, 1998
through June 30, 1998 (unaudited) and the
year ended December 31, 1997 F-2
Notes to Statements of Revenue and Certain Expenses F-3
(b) Pro Forma Financial Information (unaudited) -
The Village at Corte Madera and Carmel Plaza
Condensed Combined Statement of Operations for
the year ended December 31, 1997 F-5
Condensed Combined Statement of Operations for
the six months ended June 30, 1998 F-6
Condensed Combined Balance Sheet as of June 30, 1998 F-7
(c) Exhibits
23.1 Independent Auditors' Consent (The Village at Corte Madera)
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, The
Macerich Company has duly caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized, in the City of Santa Monica, State
of California, on November 10, 1998.
THE MACERICH COMPANY
By: /s/ Thomas E. O'Hern
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Thomas E. O'Hern
Senior Vice President and
Chief Financial Officer
INDEPENDENT AUDITORS' REPORT
The Board of Directors of
The Macerich Company and the
Managing General Partner of JMB/CM
Village Associates:
We have audited the accompanying statement of revenue and certain expenses of
The Village at Corte Madera for the year ended December 31, 1997. This
statement is the responsibility of management. Our responsibility is to
express an opinion on this statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of revenue and
certain expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the statement. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall presentation of the statement. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission as described in Note 1 to the statement of revenue and
certain expenses. It is not intended to be a complete presentation of The
Village at Corte Madera's revenue and expenses.
In our opinion, the statement referred to above presents fairly, in all
material respects, the revenue and certain expenses, as described in Note 1,
of The Village at Corte Madera for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
San Diego, California
August 25, 1998
F-1
THE VILLAGE AT CORTE MADERA
Statements of Revenue and Certain Expenses
For the period January 1, 1998 through June 30, 1998 (unaudited)
and the year ended December 31, 1997
(Dollars in Thousands)
FOR THE PERIOD
JANUARY 1, 1998
THROUGH YEAR ENDED
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997
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Revenue:
Minimum rent (note 3) $ 3,375 6,663
Overage rent 86 509
Recoveries from tenants 1,204 2,372
Other 118 171
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4,783 9,715
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Certain expenses:
Operating expenses 548 1,083
Payroll and related benefits - related party 290 505
Property taxes 376 776
Professional services 23 16
Professional services - related party 9 25
Promotion 12 28
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1,258 2,433
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Revenue in excess of certain expenses $ 3,525 7,282
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See accompanying notes to statements of revenue and certain expenses.
F-2
THE VILLAGE AT CORTE MADERA
Notes to Statements of Revenue and Certain Expenses
For the period January 1, 1998 through June 30, 1998 (unaudited)
and the year ended December 31, 1997
(Dollars in Thousands)
(1) BASIS OF PRESENTATION
The accompanying statements of revenue and certain expenses
relate to the operations of The Village at Corte Madera (the
"Property") located in Corte Madera, California. On July 24,
1998, an affiliate of the Macerich Company (the "Company")
purchased the Property from JMB/CM Village Associates, a
California general partnership, (the "Partnership").
The accompanying statements of revenue and certain expenses have
been prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and
accordingly, are not representative of the actual results of
operations of the Property for the period January 1, 1998 through
June 30, 1998 and the year ended December 31, 1997 due to the
exclusion of the following items, which may not be comparable to
the proposed future operations of the Property:
- Depreciation and amortization
- Management fees and leasing commissions
- Federal and state income taxes
- Other items not directly related to the proposed future
operations of the Property
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
(a) REVENUE RECOGNITION
Minimum rent revenue is recognized on a straight-line basis over
the term of the individual leases. Overage rent, which is based
upon the level of sales achieved by the lessee, and cart and
temporary tenant rent are recognized on an accrual basis.
Recoveries from tenants for real estate taxes, insurance and
certain other shopping center operating expenses are recognized as
revenue in the period the applicable costs are incurred.
(b) MAINTENANCE AND REPAIRS
Maintenance and repairs are charged to operations as incurred.
(c) USE OF ESTIMATES
Management has made a number of estimates and assumptions relating
to the reporting and disclosure of revenue and certain expenses
during the reporting period to prepare the statements of revenue
and certain expenses in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
(d) UNAUDITED INTERIM STATEMENT OF REVENUE AND CERTAIN EXPENSES
The statement of revenue and certain expenses for the period
January 1, 1998 through June 30, 1998 is unaudited. In the opinion
of management, such financial statement reflects all adjustments
necessary for a fair presentation of the revenue and certain
expenses for the interim period. All such adjustments are of a
normal, recurring nature.
F-3
THE VILLAGE AT CORTE MADERA
Notes to Statements of Revenue and Certain Expenses
For the period January 1, 1998 through June 30, 1998 (unaudited)
and the year ended December 31, 1997
(Dollars in Thousands)
(3) COMMITMENTS AND CONTINGENCIES
SHOPPING CENTER LEASES
Shopping center space is leased to tenants under various operating
leases with terms ranging primarily from 2 to 20 years. The leases
generally provide for minimum rent and reimbursement of real estate
taxes, insurance and certain other operating expenses. The
majority of the leases also provide for additional overage rent
during any year in which a tenant's gross sales exceed a stated
amount.
Future minimum rent revenue to be received under leases in force at
December 31, 1997 are as follows:
YEARS ENDING DECEMBER 31,
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1998 $ 6,685
1999 6,431
2000 6,133
2001 5,390
2002 5,263
Thereafter 14,952
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$ 44,854
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(4) RELATED PARTY TRANSACTIONS
Affiliates of the previous owner have provided various services to the
Property, which include the employment of onsite Property personnel and the
retention of third party professional services for Property matters. A
summary of costs and fees incurred and expensed for these Property specific
services for the year ended December 31, 1997 follows:
Payroll and related benefits $ 505
Professional services 25
F-4
The following unaudited pro forma condensed combined statement of operations
has been prepared for the year ended December 31, 1997. This statement gives
effect to the acquisitions of The Village at Corte Madera and Carmel Plaza as
if the acquisitions were completed on January 1, 1997. This statement does
not purport to be indicative of the results of operations that actually would
have resulted if the Registrant had owned the malls throughout the period
presented.
THE MACERICH COMPANY
UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
PRO FORMA
ADJUSTMENT-
THE VILLAGE PRO FORMA
COMPANY RESULTS AT RESULTS
FOR THE YEAR CORTE MADERA FOR THE YEAR
ENDED AND ENDED
DEC. 31, 1997 CARMEL PLAZA DEC. 31, 1997
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Revenues:
Minimum Rents $ 142,251 $ 9,794 $ 152,045
Percentage Rents 9,259 899 10,158
Tenant Recoveries 66,499 3,366 69,865
Other 3,205 820 4,025
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Total revenues 221,214 14,879 236,093
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Shopping center expenses 70,901 3,678 74,579
REIT general and administrative expenses 2,759 0 2,759
Depreciation and amortization 41,535 3,395(A) 44,930
Interest expense 66,407 11,025(B) 77,432
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Net income (loss) before gain on sale of asset,
minority interest, unconsolidated joint
ventures and extraordinary loss 39,612 (3,219) 36,393
Gain on sale of asset 1,619 0 1,619
Minority Interest (C) (10,567) 1,029 (9,538)
Loss from unconsolidated joint ventures and
management companies (8,063) 0 (8,063)
Extraordinary loss on early retirement of debt (555) 0 (555)
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Net income (loss) $ 22,046 ($ 2,190) $ 19,856
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BASIC EARNINGS PER SHARE:
Net income per share before extraordinary items $ 0.86 $ 0.78
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Net income per share $ 0.85 $ 0.76
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Weighted average number of shares outstanding 25,891 26,165
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DILUTED EARNINGS PER SHARE:
Net income per share before extraordinary items $ 0.85 $ 0.77
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Net income per share $ 0.84 $ 0.76
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Weighted average number of shares outstanding 38,400 38,674(D)
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NOTE: This information should be read in conjunction with The Macerich
Company's (the "Company") report on Form 10-K for the year ended
December 31, 1997.
(A) Depreciation on the depreciable basis of The Village at Corte Madera and
Carmel Plaza is computed on the straight-line method over the estimated
useful life of 39 years.
(B) Interest expense for The Village at Corte Madera is based on the debt to
which the property is pledged as collateral, which was assumed at the
time of acquisition. The loan amount was $40,000 at an effective market
interest rate of 7%. In addition, $72,000 was borrowed under the
Company's line of credit at an interest rate of 7%.
Interest expense for Carmel Plaza is based on a $45,500 borrowing under
the Company's line of credit at an interest rate of 7%.
(C) Minority interest represents the ownership interest in the Operating
Partnership not owned by the Company.
(D) Includes 274 in OP Units (valued at $8,000 at the time of acquisition)
which were issued as part of the consideration for the acquisition of
The Village at Corte Madera.
F-5
The following unaudited pro forma condensed combined statement of operations
has been prepared for the six months ended June 30, 1998. This statement
gives effect to the acquisitions of The Village at Corte Madera and Carmel
Plaza as if the acquisitions were completed on January 1, 1998. This
statement does not purport to be indicative of the results of operations that
actually would have resulted if the Registrant had owned the malls throughout
the period presented.
THE MACERICH COMPANY
UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
PRO FORMA
ADJUSTMENT-
COMPANY RESULTS THE VILLAGE AT PRO FORMA RESULTS
FOR THE SIX CORTE MADERA FOR THE SIX
MONTHS ENDED AND MONTHS ENDED
JUNE 30, 1998 CARMEL PLAZA JUNE 30, 1998
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Revenues:
Minimum Rents $ 79,629 $ 5,042 $ 84,671
Percentage Rents 4,250 346 4,596
Tenant Recoveries 36,822 1,706 38,528
Other 1,881 663 2,544
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Total revenues 122,582 7,757 130,339
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Shopping center expenses 38,001 1,908 39,909
REIT general and administrative expenses 2,177 0 2,177
Depreciation and amortization 23,607 1,697(A) 25,304
Interest expense 41,212 5,513(B) 46,725
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Net income (loss) before gain on sale of
asset, minority interest, unconsolidated
joint ventures and extraordinary loss 17,585 (1,361) 16,224
Gain on sale of asset 9 0 9
Minority Interest (C) (6,190) 401 (5,789)
Income from unconsolidated joint ventures and
management companies 5,582 0 5,582
Extraordinary loss on early retirement of debt (90) 0 (90)
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Net income (loss) 16,896 (960) 15,936
Less: dividends to preferred shareholders 2,706 0 2,706
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Net income (loss) available to
common shareholders $ 14,190 ($960) $ 13,230
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BASIC EARNINGS PER SHARE:
Net income per share before extraordinary
items $ 0.49 $ 0.46
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Net income per share $ 0.49 $ 0.45
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Weighted average number of shares outstanding 28,975 29,249
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DILUTED EARNINGS PER SHARE:
Net income per share before extraordinary
items $ 0.49 $ 0.46
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Net income per share $ 0.49 $ 0.46
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Weighted average number of shares outstanding 41,682 41,956(D)
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NOTE: This information should be read in conjunction with The Macerich
Company's (the "Company") report on Form 10-Q for the quarter ended June 30,
1998.
(A) Depreciation on the depreciable basis of The Village at Corte Madera and
Carmel Plaza is computed on the straight-line method over the estimated
useful life of 39 years.
(B) Interest expense for The Village at Corte Madera is based on the debt to
which the property is pledged as collateral, which was assumed at the
time of acquisition. The loan amount was $40,000 at an effective market
interest rate of 7%. In addition, $72,000 was borrowed under the
Company's line of credit at an interest rate of 7%.
Interest expense for Carmel Plaza is based on a $45,500 borrowing under
the Company's line of credit at an interest rate of 7%.
(C) Minority interest represents the ownership interest in the Operating
Partnership not owned by the Company.
(D) Includes 274 in OP Units (valued at $8,000 at the time of acquisition)
which were issued as part of the consideration for the acquisition of The
Village at Corte Madera.
F-6
THE MACERICH COMPANY
UNAUDITED PRO FORMA
CONDENSED COMBINED BALANCE SHEET
(ALL AMOUNTS IN THOUSANDS)
PRO FORMA
ADJUSTMENT-
THE MACERICH THE VILLAGE AT PRO FORMA
COMPANY CORTE MADERA CONDENSED COMBINED
AS REPORTED AS OF AND BALANCE SHEET AS OF
JUNE 30, 1998 CARMEL PLAZA JUNE 30, 1998
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Gross property $1,742,436 $165,500 (A) $1,907,936
Other assets 214,946 (33,361) 181,585
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Total assets $1,957,382 $132,139 $2,089,521
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Mortgages and loans $1,188,791 $125,500 (A) $1,314,291
Other Liabilities 50,652 0 50,652
Minority Interest 161,680 7,599 169,279
Preferred stock 250,000 0 250,000
Common stock 325 0 325
Additional paid in capital 305,934 (960) 304,974
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Total liabilities and stockholders' equity $1,957,382 $132,139 $2,089,521
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(A) A 40% interest in The Village at Corte Madera was acquired as of June
30, 1998 including assumption of 40% of the existing debt. This
acquisition was accounted for using the equity method of accounting and
was reflected under Investment in joint ventures and the Management
Companies in the Company's Form 10-Q as of June 30, 1998.
F-7
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION PAGE
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23.1 Independent Auditors' Consent
(The Village at Corte Madera)